The 1999-00 Budget Act
and Related Legislation
The budget includes almost $38 billion in Proposition 98 spending in
1999-00 for K-14 education. This represents an increase of $2.3 billion, or 6.5 percent over the revised 1998-99 funding level. Figure 1 (see page 16) summarizes for 1998-99 and 1999-00 the effect of the budget package on
K-12 schools, community colleges, and other specified agencies.
|Proposition 98 Budget Summary|
|1998-99 and 1999-00
(Dollars in Billions)
1999-00 Budget Act
|Budget Act a||Revised|
|K-12 Proposition 98|
|Local property taxes||9.2||9.3||9.9|
|Average Daily Attendance (ADA)||5,453,060||5,497,849||5,578,766|
|Amount per ADA||$5,735||$5,751||$6,025|
|California Community Colleges|
|Local property taxes||1.4||1.5||1.6|
|Totals, Community Colleges||$3.6||$3.6||$3.9|
|Proposition 98 Summary|
|Local property taxes||10.6||10.8||11.4|
|Totals, Proposition 98||$35.2||$35.6||$37.9|
|a Includes related legislation.|
The Legislature appropriated more General Fund monies than required to meet the Proposition 98 constitutional minimum. This is the second year in a row that the Legislature has made such a decision. Specifically, the Legislature appropriated $286 million more than the 1998-99 minimum funding level and $109 million more than what would have been required to satisfy the guarantee in 1999-00.
The K-12 portion of the Proposition 98 package includes:
Figure 2 (see page 17) displays K-12 per-pupil funding amounts from 1992-93 through 1999-00. After adjusting for the effects of inflation and changes in attendance accounting, per-pupil funding has increased $1,086, or 22 percent, over the period.
1999-00 Increases. Compared to the 1998-99 Budget Act, K-12 Proposition 98 funding increased by $2.3 billion. The budget allocates $1 billion for inflation and growth adjustments. Specifically, the budget includes $561 million to accommodate a projected 1.5 percent increase in student population, and $446 million for a 1.41 percent cost-of-living adjustment (applicable to most program funding).
The budget directs the remaining $1.4 billion for other purposes, including $366 million for special session bills (see box, page 18) and funding for other new programs and existing categorical programs. Some of the major increases noted in Figure 3 are as follows:
|Major 1999-00 K-12
|Revenue limit "deficit reduction"||$455|
|School safety block grant (ongoing)||71|
|Teacher performance bonuses||50|
|Beginning teacher salary increase||50|
|High school class size reduction||28|
|Charter school funding model||20|
|a Budget bill and education trailer bills.|
Special Session Legislation
In April, the Governor signed into law four special session bills related to K-12 education. These bills introduced new programs related to school accountability, reading, teacher quality, and a high school exit exam. The budget includes $379 million from the General Fund for these new initiatives ($366 million Proposition 98), as summarized below.
The budget provides $158 million for unanticipated attendance growth in 1998-99 (45,000 ADA). The budget also includes $210 million for various other K-12 purposes that will be counted towards Proposition 98 minimum funding requirements for 1998-99 or prior years. Figure 4 (see page 20) lists the most significant of these allocations.
|Major K-12 Expenditures From
|ADAa growth (revenue limits and special education)||$158|
|Instructional materials increase||134|
|Digital high school||44|
|Special education COLAb||41|
|School safety block grant (one-time)||29|
|Prior-year desegregation claims||26|
|a Average daily attendance.|
|b Cost-of-living adjustment.|
The Governor vetoed $12.7 million in prior-year (one-time) funding and $103.7 million in 1999-00 Proposition 98 funds for K-12 programs in the budget and trailer bills. Of the 1999-00 vetoed funds, the Governor deleted increases for high school block grants ($29 million) and parent involvement grants ($11.8 million). In addition, the Governor deleted $50 million for Stage III child care for former California Work Opportunity and Responsibility to Kids (CalWORKs) recipients. He set these funds aside for restoration upon enactment of legislation that would (1) schedule the funds for Stage II child care, and (2) "grandfather" into continuous care any families served with these funds in 1998-99 who exhaust transitional benefits in the budget year.
The budget includes significant funding increases for the University of California (UC), California State University (CSU), California Community Colleges (CCC), and the Student Aid Commission. It provides sufficient funds to accommodate enrollment growth. The budget also provides $64 million from the General Fund to compensate the three public systems for the revenue loss associated with reducing UC and CSU resident-student fees by 5 percent and community college fees from $12 to $11 per unit. Figure 5 shows the change in funding for each major segment of higher education for 1999-00 from the General Fund and local property tax revenue.
|Higher Education Budget Summary
General Fund and Local Property Tax Revenue
|(Dollars in Millions)|
|1999-00 Budget||Change From 1998-99|
|University of California||$2,697||$178||7.1%|
|California State University||$2,253||$125||5.9%|
|California Community Colleges|
|General Fund (Proposition 98)||$2,305||$161||7.5%|
|Totals, Community Colleges||$3,873||$250||6.5%|
|Student Aid Commission||$388||$45||13.0%|
The budget provides $178 million, or 7.1 percent, more in General Fund support for UC in 1999-00 than in 1998-99. The major augmentations include:
The budget provides $125 million, or 5.9 percent, more in General Fund support for CSU in 1999-00 than in 1998-99. Major augmentations include:
The budget package contains major funding increases for community colleges. General Fund spending for community colleges totals approximately $2.3 billion in the budget year. This represents a $161 million, or 7.5 percent, increase above the 1998-99 level. Despite expected enrollment growth, student fee revenues are expected to decline by $13 million, mainly due to the $1 per-credit-unit reduction approved in the budget.
1999-00 Expenditures. Figure 6 illustrates the major program increases funded in 1999-00. The budget includes $116 million to fund enrollment growth of 3.5 percent and $48.4 million for COLAs of 1.4 percent.
Major Increases 1999-00
|Partnership for Excellence||45.0|
|Reading development partnerships||10.0|
The Partnership for Excellence Program was established last year with an initial appropriation of $100 million in the 1998-99 Budget Act. This year's budget act increases this program by $45 million or 45 percent. As was the case last year, the entire $145 million in Partnership for Excellence funds will be distributed to districts on a per-student basis to improve the performance of colleges in teaching students. The CCC Board of Governors is fine-tuning the outcome measures and goals upon which future performance will be assessed. Beginning with the 2001-02 fiscal year, the board will consider whether Partnership for Excellence funds should be allocated based on district performance.
Governor Vetoed Legislation to Add $22.5 Million. The Governor vetoed $22.5 million from the amount approved by the Legislature for the community colleges in the 1999-00 Budget Act. The vetoes included $10.6 million for full-time faculty and $9.8 million for several student-services programs.
The budget appropriates $388 million from the General Fund for the Student Aid Commission in 1999-00. This is $45 million, or 13 percent, above expenditures in 1998-99. The growth in the commission's budget provides for 10,518 additional new Cal Grant awards and an increase in the maximum annual grant amount from $9,036 to $9,422.
In this section, we describe the major features of the health and social services funding in the state spending plan. General Fund support for health and social services programs in 1999-00 totals $16.9 billion, an increase of 3.6 percent over the prior year. This growth in expenditures is the result of various program changes, including expanded health insurance coverage, and workload-related activities. Figure 7 shows the changes in expenditures in the major welfare grant programs and the Medi-Cal Program.
|Medi-Cal and Major Welfare Grant Programs
|1998-99 and 1999-00
(Dollars in Millions)
Figure 8 (see page 24) describes the major General Fund changes (from prior law) enacted in the 1999-00 Budget
Act and related legislation. The major health trailer bill was Chapter 146, Statutes of 1999 (AB 1107, Cedillo) and
the major social services trailer bill was Chapter 147, Statutes of 1999
(AB 1111, Aroner).
|Health and Social Services Programs
Major 1999-00 Policy Changes--General Fund
|Program/Issue||Change From Prior Law|
|Expanded eligibility for parents||$41.0|
|Nursing home reform||36.0|
|Provider rate increases||31.2|
|Disproportionate share hospitals||30.0|
|Institutions for mental diseases||12.5|
|Family planning--federal funds shift||-146.7|
|Increase federal match||-210.0|
|Expanded eligibility for children||$10.4|
|County Medical Services Program||-$20.2|
|Expanded Access to Primary Care||7.9a|
|Breast cancer treatment||5.0|
|Local incentive grants||$10.0|
|California Food Assistance program||$6.5|
|Cash Assistance Program for Immigrants||--|
|Other Social Services Programs|
|IHSS Public Authorities||$33.6|
|Foster Care rate increases||7.3b|
|Adult Protective Services||--b|
|Community Care Facilities--3 percent rate increase and SSI/SSP pass-through||10.1|
|a General Fund increase over current year.|
|b Figure excludes increases provided pursuant to current law.|
The California Medical Assistance (Medi-Cal) Program provides health care services to welfare recipients and to other qualified low-income persons (primarily families with children and the aged, blind, or disabled). The Department of Health Services (DHS) administers the program.
The budget appropriates $7.1 billion from the General Fund for Medi-Cal benefits in 1999-00, an increase of 1.6 percent over estimated General Fund spending in 1998-99. This is due primarily to cost increases for health care services and certain program changes, partially offset by savings from cost shifts to federal funds. Without these cost shifts, the growth in General Fund spending would be about 6.7 percent.
The budget also appropriates a total of $450 million from the General Fund in 1999-00 for eligibility administration by the counties and claims payments by the state's fiscal intermediary, which is an increase of 10.8 percent over estimated 1998-99 spending. The DHS budget also includes $12.3 billion of federal Medicaid funds in 1999-00. This includes (1) funds that match state Medi-Cal funds in the DHS budget, (2) supplemental disproportionate share hospital (DSH) payments, and (3) funds that match state and local funds in other related programs that qualify for Medicaid funding.
Expanded Eligibility for Parents. Effective March 1, 2000, budget legislation expands eligibility to parents in low-income families with incomes up to 100 percent of the federal poverty level (plus applicable income deductions). Currently, the income limit for parents applying for Medi-Cal is about 86 percent of the poverty level, although children in families with incomes up to 200 percent of the poverty level are eligible for coverage under either the Medi-Cal or Healthy Families Programs.
This expansion also makes working parents in two-parent families eligible for Medi-Cal if they meet the income requirement. At present, only single parents or unemployed parents (defined as working less than 100 hours per month) qualify to apply for Medi-Cal. The department estimates that these changes will increase Medi-Cal enrollment by 249,000 additional parents, when implemented.
The budget bill passed by the Legislature included a General Fund augmentation of $67.7 million for additional Medi-Cal benefit costs for expanded parental eligibility in 1999-00. However, the budget bill envisioned a somewhat broader eligibility expansion than that authorized in the implementing legislation ultimately passed by the Legislature and agreed to by the administration. The Governor reduced the budget augmentation by $26.7 million, to $41 million, in order to make the appropriation consistent with the DHS cost estimate for the enacted expansion.
Nursing Home Reform. The budget includes $36 million from the General Fund to augment Medi-Cal payments to nursing homes in order to fund the following staffing improvements: (1) a 5 percent pay increase for direct-care staff and (2) an increase in the staffing ratio to a minimum of 3.2 nursing hours per patient, effective January 1, 2000.
Provider Rate Increases. The budget as passed by the Legislature included $39.5 million from the General Fund for various Medi-Cal provider rate increases. The Governor reduced this amount to $31.2 million from the General Fund. The approved increases include the following services: general anesthesia, surgery, and radiology services ($11.8 million for a 9.5 percent increase); obstetric anesthesia services ($1.2 million for a 20 percent increase); adult in-home nursing services ($8.2 million to equalize with rates for children); optometrists ($1.4 million for a 22 percent increase); ambulances ($2 million for a 25 percent increase); pediatric specialty care for conditions qualifying for the California Children's Services Program ($0.7 million for a 5 percent increase); multiple surgical procedures ($2.4 million to provide a flat 50 percent discount instead of steeper discounts for each added procedure); and cardiac catheterization procedures ($3.4 million to correct an error in the rates).
Reduced State "Takeout" From DSH Payments. The budget includes a General Fund augmentation of $30 million in the Medi-Cal Program to backfill for an equivalent reduction in the state takeout from DSH transfers made by public hospitals operated by counties, the University of California, and local hospital districts. The state takeout is used to offset a portion of the General Fund cost of the Medi-Cal Program. The remainder of the transfers, along with matching federal funds, is returned as DSH payments to qualifying public and private hospitals. Budget legislation reduces by $30 million (to $84.8 million) the amount of public hospital transfers to the state, and reallocates DSH payments so that public and private DSH hospitals will share equally in this benefit.
Patients in Institutions for Mental Diseases (IMDs). The budget includes $12.5 million from the General Fund to pay for ancillary outpatient services for Medi-Cal patients in IMDs. These costs have been disallowed by the federal government and no longer qualify for regular Medi-Cal coverage. Budget legislation makes these services available on a state-only basis for 1999-00. Absent this change, these costs would have been shifted to counties.
Family Planning ProgramFunding Shift and Expansion. The budget anticipates federal approval of a waiver providing 90 percent federal funding for the current state-only family planning program (serving women above the normal Medi-Cal income limits). This shift results in General Fund savings of $146.7 million in 1999-00. The budget also augments funding for the program by a total of $46.9 million ($4.7 million General Fund) to expand family planning and reproductive health services to males; serve persons of reproductive age who are not at risk of pregnancy; and provide vaccinations for measles, mumps, and rubella.
Assumed Increase in Federal Matching Rate. The budget assumes $210 million of General Fund savings that depend on action by the federal government to increase the federal matching rate for California's Medi-Cal Program. The increase in the matching rate would correct an underestimation of the state's population in the federal Medicaid funding formula.
Long-Term Care for Undocumented Immigrants. The budget includes $17.4 million from the General Fund for the ongoing Medi-Cal cost of long-term care for undocumented immigrants (which is funded entirely by the state). Budget legislation reauthorizes this program in order to comply with federal law prohibiting certain state and local benefits for undocumented immigrants in the absence of new state law. The budget legislation also limits new users of this benefit to those that can be served within the funding appropriated in the annual budget, and limits future growth in the program's funding to "the amount necessary to serve 110 percent of the 1999-00 estimated eligible population."
The Healthy Families Program implements the federal Children's Health Insurance Program, enacted in 1997. Funding generally is on a 2-to-1 federal/state matching basis. Families pay a relatively low monthly premium and can choose from a selection of managed care plans for their children. Coverage is similar to that offered to state employees and includes dental and vision benefits. The program began enrolling children in July 1998.
Program Expansion. The 1999-00 General Fund budget for the Healthy Families Program totals $76.2 million. The budget includes $10.4 million from the General Fund to expand eligibility for children's health coverage under the Healthy Families Program. The expansions (1) increase the family income limit from 200 percent to 250 percent of the poverty level, (2) allow use of the same income deductions used in computing family income for the Medi-Cal Program, and (3) establish a one-year, state-only program to cover children who are legal immigrants who do not qualify for federal funding because they entered the U.S. after August 22, 1996. (Pending federal legislation would eliminate this restriction.) When fully implemented, these expansions are expected to increase the program's caseload by almost 170,000 children.
The DHS administers a broad range of public health programs. Among these are (1) programs that complement and support the activities of local health agencies controlling environmental hazards, preventing and controlling disease, and providing health services to populations with special needs; and (2) state-operated programs, such as those that license health facilities and certain types of technical personnel.
State Funds Suspended for County Medical Services Program. The budget legislation suspends, for one year, the statutory General Fund appropriation of $20.2 million for the County Medical Services Program, which provides health care for low-income adults in small counties.
HIV/AIDS Programs. The budget includes a $13.4 million General Fund increase for various HIV/AIDS programs, including education and outreach, prevention, treatment and care services, and evaluation and surveillance activities.
Primary Care Clinics. As enacted by the Legislature, the budget bill appropriated $22.1 million from the General Fund for the Expanded Access to Primary Care program, which was an increase of $18 million over current-year expenditures. The Governor, however, vetoed $10.1 million of this increase.
New Program for Breast Cancer Treatment. Budget legislation established a one-year program to provide breast cancer treatment services to persons with incomes at or below 200 percent of the poverty level. The budget appropriates $5 million from the General Fund to be matched with non-General Fund sources.
Breast Cancer Screening. As enacted by the Legislature, the budget included a General Fund appropriation of $14.9 million (in lieu of Proposition 99 funds proposed by the Governor) for the Breast Cancer Early Detection Program. The Governor vetoed the General Fund appropriation and, in his veto message, stated that he would approve legislation to appropriate this amount from a different fund source, specifically the Cigarette and Tobacco Products Surtax Fund (Proposition 99).
The Department of Mental Health directs and coordinates statewide efforts for the treatment of mental disabilities. The department's primary responsibilities are to (1) administer the Bronzan-McCorquodale and Lanterman-Petris-Short Acts, which provide for the delivery of mental health services through a state-county partnership and for involuntary treatment of the mentally disabled; (2) operate four state hospitals and the Acute Psychiatric Program at the California Medical Facility at Vacaville; and (3) administer community programs directed at specific populations.
Local Incentive Grants. The budget includes $10 million from the General Fund, on a one-time basis, to provide grants to counties for training and integrated services to severely mentally ill adults at risk of homelessness or incarceration.
In response to federal welfare reform legislation, the Legislature created the CalWORKs program in 1997. This program, which replaced the Aid to Families with Dependent Children program, provides cash grants and welfare-to-work services to families with children whose incomes are not adequate to meet their basic needs. The budget plan provides $1.9 billion from the General Fund for the CalWORKs program in 1999-00, which is a decrease of 2.1 percent from 1998-99.
CalWORKs Budget Reflects Current Law. The budget includes $102.6 million (federal Temporary Assistance for Needy Families [TANF] block grant funds) to provide a 2.36 percent cost-of-living adjustment (COLA) pursuant to prior and current law. Effective July 1, 1999, the maximum grant for a family of three in high-cost counties will increase by $15 to a total of $626 per month, and the corresponding grant in low-cost counties will increase by $14 to a total of $596 (see Figure 9). For CalWORKs employment services, the budget provides $1.2 billion (General Fund and federal TANF funds), an increase of about $500 million over estimated prior year expenditures. This increase is attributable to the "ramp-up" of the new CalWORKs program. We note that the budget for 1999-00 includes $655 million in funds that will be carried over from unexpended balances in 1998-99 and therefore represent a one-time source of funding.
|CalWORKs and SSI/SSP
Maximum Monthly Grants
|1998-99 and 1999-00|
|a Family of three.|
|b Effective January 1, 2000.|
The Food Stamps program provides food stamps to low-income persons. The cost of the food stamps coupons (over $2 billion) is borne entirely by the federal government, with the exception of the state-only program for noncitizens that is discussed below.
Continuation and Expansion of State-Only Program for Legal Noncitizens. With respect to noncitizens, current federal law generally limits food stamps benefits to legal noncitizens who immigrated to the U.S. prior to August 1996 and are under age 18 or over age 64. Created in 1997, and subsequently expanded in 1998, the California Food Assistance Program (CFAP) provides state-only food stamps benefits to (1) pre-August 1996 immigrants who are ineligible for federal benefits and (2) a very limited number of federally ineligible post-August 1996 immigrants whose sponsors are dead, disabled, or abusive. Under prior law, CFAP was to sunset on June 30, 2000. The budget legislation (1) expands eligibility, for one year only, to immigrants who arrived after August 1996 and (2) extends the sunset indefinitely by tying continuation of the state program to the continuation of certain federal benefits for noncitizens (which currently has no sunset). The one-year program expansion results in General Funds costs of $6.5 million in 1999-00. The out-year costs for continuing the program are approximately $55 million annually, beginning in 2000-01.
The SSI/SSP is a state and federally funded program that provides grants to low-income aged, blind, and disabled persons. The budget appropriates $2.5 billion from the General Fund for the program in 1999-00, which is an increase of 10.2 percent over 1997-98. This spending increase is largely attributable to higher grants effective January 2000 and caseload growth.
Grant Payments. Pursuant to prior and current law, the budget provides for the statutory COLA (2.36 percent) for SSI/SSP grants, at a General Fund cost of $33 million in 1999-00. Effective January 1, 2000 the maximum grant for aged and disabled individuals will increase by $16 to a total of $692 per month, and the grant for couples will increase by $28 to $1,229 per month (see Figure 9).
In addition, the budget legislation repeals a statutory provision that would have required a 4.9 percent grant reduction in low-cost counties in the future (estimated to occur in 2002-03, depending on certain technical factors). Eliminating this 4.9 percent regional grant reduction will result in annual General Fund costs (in the form of lost savings) of over $100 million, beginning in 2002-03.
Continuation and Expansion of State-Only Program for Immigrants. With respect to noncitizens, current federal law generally limits SSI benefits to noncitizens who were (1) on aid prior to August 1996 or (2) in the U.S. prior to August 1996 and who subsequently become disabled. In 1998, the Legislature created the Cash Assistance Program for Immigrants (CAPI) to provide state-only SSI/SSP benefits to (1) federally ineligible aged, but not disabled, noncitizens who immigrated prior to August 1996 and (2) a very limited number of federally ineligible post-August 1996 immigrants whose sponsors are dead, disabled, or abusive.
Under prior law, the CAPI program was to sunset on June 30, 2000. The budget legislation (1) expands eligibility, for one year only, to immigrants who arrived after August 1996 and (2) extends the sunset indefinitely by tying continuation of the state program to the continuation of certain federal benefits for noncitizens (which currently has no sunset).
The program expansion has no budget-year cost because of a deeming provision which attributes the sponsor's income to the immigrant. The out-year costs for continuing the program are approximately $25 million annually, beginning in 2000-01.
The IHSS program provides various services to eligible aged, blind, and disabled persons who are unable to remain safely in their own homes without such assistance.
Public Authorities. Under prior law, counties that established Public Authorities to negotiate IHSS provider wage increases had to pay 100 percent of the cost of any increases above the minimum wage. The budget includes $33.6 million from the General Fund for a state share of the costs of provider wage increases in 1999-00 that are negotiated by Public Authorities. Specifically, budget-related legislation provides that, for 1999-00, the state shall pay for 80 percent of the nonfederal costs of such wage increases, up to a maximum increase of 50 cents per hour above the minimum wage.
The Foster Care program provides grants to pay for the care of children placed in foster family homes or group homes.
Rate Increases. The budget includes $6.4 million from the General Fund for the regular statutory 2.36 percent COLA for Foster Family Homes and Group Homes. The budget also includes $7.3 million from the General Fund to provide: (1) a 2.36 percent COLA for Foster Family Agencies, (2) a full COLA for six counties that were previously scheduled to receive partial COLAs, and (3) an additional 2.36 percent increase for all foster care providers, effective January 1, 2000.
The APS program provides assistance to the elderly and functionally disabled adults who are victims of abuse, neglect, or exploitation.
Program Expansion. The budget as passed by the Legislature included $65.3 million from the General Fund for the APS program. The Governor, however, vetoed $20 million. The resulting $45.3 million is an increase of $25.3 million (127 percent) over 1998-99. This appropriation funds the provisions of Chapter 946, Statutes of 1998 (SB 2199, Lockyer), which broadened the scope of the APS program.
The Department of Developmental Services contracts with 21 nonprofit regional centers to coordinate educational, vocational, and residential services for developmentally disabled clients. The department also operates five state developmental centers that house developmentally disabled clients who require residential care.
Community Care Facility (CCF) Rate Increases. The budget appropriates $10.1 million from the General Fund (including the state share of Medicaid reimbursements) for a 3 percent rate increase for CCFs that serve developmentally disabled clients, effective July 1999, and the "pass-through" of SSI/SSP COLAs for these clients. The budget also includes $14.3 million from the General Fund (including the state share of reimbursements) for a 9.8 percent rate increase, effective January 2000, which will be used for salary increases for direct care staff who pass competency tests or complete a training course, pursuant to a program initiated in 1998-99.
The 1999-00 budget for judicial and criminal justice programs totals $6.9 billion, including $6.3 billion from the General Fund and $636 million from various special funds. This is an increase of $458 million, or 7.1 percent, over 1998-99 expenditures. The increase is the result of four primary factors: (1) additional costs associated with the state's increased financial responsibility for support of trial courts, (2) increases in spending to accommodate projected caseload growth, (3) increases in spending for new and expanded treatment programs for prison inmates and parolees, and (4) increased funding for programs to assist local law enforcement agencies. Figure 10 shows the final budget for major judiciary and criminal justice programs.
|Major Judiciary and Criminal Justice Programs
|(Dollars in Millions)|
|Department of Corrections||$3,973.4||$4,115.8||$142.4||3.6%|
|Department of the Youth Authority||$319.7||$321.9||$2.2||0.7%|
|Offset for undocumented felons (federal funds)||$183.9||$272.7||$88.8||48.3%|
|Board of Corrections||$52.4||$115.4||$63.0||120.3%|
|Special and bond funds||19.3||17.3||-2.0||-10.4|
|Office of Criminal Justice Planning||$62.3||$97.0||$34.8||55.9%|
|Trial Court Funding||$1,638.4||$1,805.2||$166.8||10.2%|
|Fines and penalties||224.0||223.5||-0.6||-0.3|
|Court-related fees and other||159.9||202.9||43.0||26.9|
The 1999-00 spending amount is about $8.9 million, or less than 1 percent, above the Governor's proposed budget. Although the net amount is close to the spending level proposed by the Governor, the Legislature made a number of changes to the Governor's budget, including new policy initiatives and augmentations and modifications to individual spending proposals.
The budget includes $1.8 billion for support of trial courts. This amount includes $921 million from the General Fund, $223 million from fine and penalty revenues, $203 million from court fee revenues, and $458 million transferred from counties to the state. The General Fund amount is $222 million, or 32 percent, greater than the current-year amount. This increase is due in large part to legislation adopted in 1997 and 1998 whereby the state has substantially increased financial responsibility for operation of the trial courts and the county costs have been capped and reduced. Accordingly, the budget includes a reduction in county contributions and a corresponding increase in General Fund costs of $97.5 million.
The budget also includes a number of other substantial General Fund augmentations, all of which were proposed by the Governor in either the January budget or the May Revision. These include $41.3 million for salary increases for trial court employees that were negotiated previously between the counties and court employees, $19.2 million for various services (such as information technology) that were previously provided to the courts by counties, and $19.1 million to correct computer problems in the trial courts associated with the year 2000 change. The budget package also includes $2.1 million and provisions in a Chapter 67, Statutes of 1999 (AB 1105, Jackson) to establish new programs to assist courts with complex litigation and to establish alternative dispute resolution pilot projects.
The budget also includes $5.5 million to establish 20 new trial court judgeships ($2.5 million) and 12 new appellate court justices ($3 million), beginning in the last quarter of 1999-00. Full-year costs of the new judgeships and justices will be about $22 million. Legislation to create the new judgeships and justices had not been enacted at the time this report was prepared.
The Legislature augmented the Governor's proposed Trial Court Funding budget by $7 million to increase the rates paid to trial court interpreters; however, the Governor reduced the augmentation to $2.5 million.
The budget provides a total of $4.1 billion from the General Fund for support of the California Department of Corrections (CDC). This represents an increase of $142 million, or 3.6 percent, above the 1998-99 level. This is the smallest rate of increase in the CDC budget in recent years, resulting primarily from somewhat slower projected increases in the prison inmate and parole populations than in recent years.
The budget provides full funding for the projected inmate and parole caseloads. The budget assumes that the inmate population will reach about 167,300 inmates at the end of the budget year, an increase of about 3.4 percent from 1998-99. The projected budget-year population is about 3,600 inmates fewer than was initially assumed in the Governor's January budget. The parole population is projected to reach about 118,100 parolees at the end of the budget year, an increase of 3.4 percent.
The Legislature made several modifications to the Governor's proposed expenditures for CDC. One of the largest related to the Governor's proposed augmentation of $77 million to address various "structural" deficiencies in CDC's base budget, including providing more money for merit salary increases and restoring previous unallocated budget reductions. The Legislature reduced the proposal to $40.7 million, for a General Fund savings of $36.3 million.
Accommodating Prison Population Growth. In the May Revision, the Governor requested $355 million from the General Fund to fully fund planning and construction of a new maximum security prison at Delano in Kern County and for planning for a second prison in San Diego. The Legislature initially rejected the Governor's proposal and instead augmented the budget by $38.7 million to fully implement and expand prison inmate and parole treatment programs designed to reduce recidivism and thus reduce growth in the inmate population. A trailer bill, AB 1112 (Wright), made statutory changes necessary to implement two of the new programs. The Governor subsequently vetoed AB 1112, however.
The Legislature subsequently enacted Chapter 54, Statutes of 1999 (AB 1535, Florez), which authorized the new Delano prison. The bill appropriated $24 million from the General Fund for acquisition and planning costs, and authorized $311.5 million in lease-payment bonds for construction. The bill also appropriated $15.5 million from the General Fund to CDC to hire more parole agents to reduce the ratio of parolees to agents. In addition, the measure gave the administration the authority to redirect certain funds contained in the budget act to a broader array of treatment programs.
The budget assumes that the state will receive a total of $273 million in federal funds to offset the state's costs of supervising undocumented felons and wards in state prison and the Department of the Youth Authority. This is an increase of $89 million, or 48 percent, above the administration's estimate of federal funds for 1998-99. These federal funds are counted as offsets to state expenditures and are not shown in the budgets of the CDC and the Youth Authority, or in the budget bill.
At the time this report was prepared, the amount of federal funding likely to be available to California was highly uncertain and the estimated increase appeared to be in jeopardy. This is because a U.S. Senate committee in early June substantially reduced the proposed nationwide funding for this program below the prior-year level.
The budget provides $322 million (almost all from the General Fund) for support of the Youth Authority. The department's budget reflects an increase of less than 1 percent over the 1998-99 level. The budget assumes that the Youth Authority's institution population will be 7,355 wards at the end of the budget year, a drop of 275 wards, or 3.6 percent below the 1998-99 level. The parole population is expected to drop by about 2 percent, reaching 5,125 parolees at the end of the budget year. There were no major policy changes in this budget.
The budget includes a substantial amountincluding a number of augmentationsto assist local law enforcement agencies.
Citizens' Option for Public Safety (COPS) Program. In recent years, the Legislature has provided $100 million annually for the COPS program, including $75 million for local police departments and sheriffs for front-line law enforcement, $12.5 million for sheriffs for jail services, and $12.5 million for district attorneys. These funds are distributed on a per capita basis. In January, the Governor proposed to modify the program so that the entire $100 million could only be used by front-line law enforcement agencies to hire more officers. The Legislature rejected the Governor's proposal and continued the existing program.
Law Enforcement Equipment. In the May Revision, the Governor proposed $61 million from the General Fund for the Office of Criminal Justice Planning to establish a new California Local Law Enforcement Equipment Program in which money would be distributed to local law enforcement agencies on a one-time basis for purchase of equipment. The Legislature reduced the Governor's proposal to $30 million.
Local Detention Facilities. The budget includes $75 million in federal funds in the Board of Corrections' budget for distribution to counties for construction of juvenile detention facilities ($70 million) and adult jails ($5 million).
Mental Illness Grant Program. The Legislature appropriated $37.7 million from the General Fund in the Board of Corrections' budget to continue the Mentally Ill Offender Crime Reduction Grant Program, which was established in 1998-99. The Governor, however, reduced the amount for the program to $27 million. The money will be distributed to specified counties to develop programs to prevent mentally ill offenders in jails from reoffending and returning to jail after they are released.
The 1999 budget provides about $2.3 billion for support of the Department of Transportation (Caltrans) mostly from special funds. This is an increase of approximately 5 percent above the 1998-99 estimated level. The major support expenditures are as follows:
The budget also provides $2.5 billion, mainly from special funds and federal funds, for transportation capital outlay projects. In addition, the budget provides $2 billion in state and federal funds for local assistance. These funds are allocated to local transportation agencies for projects off the state highway system, including rehabilitation of local streets and roads and transit capital improvements.
In addition, the budget provides $37.5 million from the General Fund for transit rolling stock. Specifically, this amount includes:
Budget legislation was also passed to reenact transfers, totaling $161 million, from the Motor Vehicle Account and State Highway Account to the General Fund. These transfers, originally made between 1993 and 1995 in annual budget acts, were found to violate the single-subject rule of the State Constitution and thus required separate legislation.
The Governor vetoed about $2 million in General Fund local assistance for various transportation-related projects, including $1 million for the City of Livermore for construction of a three-story 805-space parking structure to serve the Altamont Commuter Express rail system. The remaining funds were for various projects, ranging from a park-and-ride facility to a street sweeper purchase.
The 1999 budget, as adopted by the Legislature, provided a total of $2.2 billion for resources programs, of which $1.1 billion is from the General Fund, $98 million is from bond funds, and $92 million is from federal funds. The remaining $918 million are special funds. This total amount is a decrease of about $61 million (2.6 percent) below estimated current-year expenditures. Significant features include:
The Legislature also disencumbered $100 million that had been appropriated for the anticipated purchase of two properties in connection with the Headwaters agreement. Of that money, $20 million had been encumbered for 1998-99 and $80 million for 1999-00. Instead, the Legislature specified that the purchase of the two properties will be paid in installments between 2000-01 and 2004-05consistent with the Headwaters agreementand reappropriated the money for encumbrance in those years. These actions returned $100 million to the General Fund for 1999-00.
The Governor vetoed $57.5 million from various resources programs
The 1999 budget, as adopted by the Legislature, provides about $960 million for environmental protection programs, including about $742 million for various environmental protection agencies and $218 million for local assistance. This amount is an increase of about $61 million, or 7 percent, over estimated 1998-99 expenditures. Significant features include:
In addition, the Legislature approved a number of trailer bills, including:
The Governor vetoed or reduced legislative augmentations totaling $22.5 million, including:
Additionally, the Governor sustained, on a one-time basis, augmentations totaling $6.5 million from the General Fund for the SWRCB to reduce permit backlogs and increase inspections. However, the Governor stated that, based on the "polluter pays principle," fees are a more appropriate funding source for these regulatory activities in the future.
The budget includes several items with a direct fiscal impact on local governments.
|Estimated Distribution of One-Time Relief to Local Governments|
|Local Government||Population Formula||ERAFa Formula||Total|
|a Educational Revenue Augmentation Fund.|
In addition to the above actions, the budget provides funding for various criminal justice and health and social services programs which benefit local government, such as the $100 million for the Citizens' Option for Public Safety program.
The 1999-00 Budget Act and related legislation includes $1.5 billion for capital outlay (after Governor vetoes and excluding highways and transits), as shown in Figure 12 (see page 44). As the figure indicates, the budget relies heavily on debt financing for capital outlay. Over 75 percent of the total is from bonds, with 56 percent from general obligation bonds (mostly in higher education) and 44 percent from lease-payment bonds. The majority of General Fund spending is in two areas--resources and corrections.
|1999-00 Capital Outlay Programs
Appropriations by Department and Fund Type
|California Science Center||--||538||--||--||538|
|Franchise Tax Board||--||963||--||--||963|
|General Services (seismic retrofit)||1,870a||--||--||--||1,870|
|General Services (other)||--||226||$275||--||501|
|Forestry and Fire Protection||4,394||17,022||--||--||21,416|
|Fish and Game||--||--||710||$250||960|
|Wildlife Conservation Board||--||50,390||2,205||--||52,595|
|Boating and Waterways||--||--||7,828||--||7,828|
|Parks and Recreation||1,288a||21,251||13,652||600||36,701|
|Santa Monica Mountains Conservancy||--||15,000||--||--||15,000|
|Coachella Valley Mountains Conservancy||--||--||100||--||100|
|Mental Health (seismic retrofit)||5,103a||--||--||--||5,103|
|Mental Health (other)||23,809||10,950||--||--||34,759|
|University of California||215,325a||--||--||--||215,325|
|California State University||260,673a||--||--||--||260,673|
|Food and Agriculture||--||1,185||--||--||1,185|
|Veterans' Home of California||--||1,001||--||--||1,001|
|a General obligation bonds--all other bond proposals are lease-payment bonds.|
|b Includes $311 million in lease-payment bonds and $24 million from the General Fund, provided under Chapter 54, Statutes of 1999 (AB 1535, Florez) for a new prison at Delano, Kern County.|
In signing the budget bill, the Governor vetoed a total of $24 million. Of this amount, $21 million was from the General Fund including $18 million from the resources area and $3 million for a Governor's residence. The remaining $3 million was an appropriation from general obligation bonds for design of a University of California research facility in San Francisco.
Some of the major projects and programs funded in 1999-00 include:
The budget includes $425 million from the General Fund for the Infrastructure Bank. This augments the $50 million appropriated for the bank in the 1998-99 Budget Act, bringing the total available funds to $475 million.
Trailer bill legislation was enactedChapter 84 (AB 1661, Torlakson)that (1) makes the funds available only for local government sponsored projects; (2) requires that all projects be consistent with the criteria, priorities, and guidelines established by the bank for the selection of projects; and (3) stipulates that no single loan can exceed 10 percent of the total appropriation ($47.5 million), except by the unanimous consent of the bank board and with 30-day written notice from the Director of Finance to the Chair and Vice Chair of the Joint Legislative Budget Committee. Assembly Bill 1661 also requires the bank to submit quarterly reports to the Governor and the Legislature during 1999-00 and 2000-01.
The budget provides $155.8 million from special funds for the continued operation of the Smog Check Program within the Department of Consumer Affairs. As part of the budget process, legislation was enactedChapter 67, Statutes of 1999 (AB 1105, Jackson)raising the eligibility threshold for state-funded repair assistance to all vehicle owners with incomes at or below 185 percent of the federal poverty level (rather than the prior limit of 175 percent). Chapter 67 also authorizes, but does not require, the department to make the following changes:
The Legislature did not make a specific appropriation for additional employee compensation that may result from collective bargaining agreements between the administration and employee bargaining units. Instead, any needed funds for this purpose will be provided from the reserve. (In taking final action on the budget, the Governor specifically set aside $300 million for employee compensation and litigation.)
Memoranda of understanding (MOUs) for all bargaining units expired on June 30, 1999. When this report was written, the administration and the bargaining units were continuing their discussions on terms of new MOUs. Any new provisions resulting in expenditure of state funds will require legislative approval.
The 1998-99 Budget Act included $20 million in a special budget item to fund efforts by state departments to modify computers to accommodate the year 2000 (Y2K) remediation efforts. As of mid-June, all of those funds had been expended and the special item had received augmentations from the state General Fund reserve of about $41.7 million. In the May Revision for the budget year, the Governor requested $64.3 million (including $44.3 million from the General Fund, $10 million from special funds, and $10 million from nongovernmental cost funds) in the special budget item for distribution to state departments for additional Y2K efforts. Of the General Fund amount, $14.3 million was designated for support of the Department of Information Technology (DOIT) Y2K project management office.
The final budget bill reduced the General Fund by $30.8 million, leaving a total of $13.5 million, all of which would be used to support the DOIT project management office. The 1999-00 Budget Act includes a provision that allows the administration to take monies from the state's reserve to supplement the Y2K item as needed.
The budget also includes $17.5 million in the DOIT budget to establish a new center to test the state's mainframe computer systems for their Y2K readiness.
The 1999-00 Budget Bill included $63.6 million for the California Arts Council ($62.8 million from the General Fund). This is more than double the amount requested by the Governor and is the result of legislative augmentations totaling $35.3 million for grants to 40 specified museums and cultural institutions. The Governor, however, reduced or eliminated $9.2 million in appropriations for 10 museums and cultural institutions, leaving the Arts Council with a total budget of $54.4 million for 1999-00, including $26.2 million for museum funding.
The budget increases General Fund support for pest exclusion activities at both the state and local level. Specifically, it provides:
The budget sent to the Governor included a total of $27.5 million in augmentations for housing programs: $10.5 million requested by the Governor in the May Revision and an additional $17 million in legislative augmentations. The Governor vetoed almost $10 million from legislative augmentations, leaving nearly $18 million in new spending on housing. These dollars will be used to fund the Governor's Housing Task Force, a new welfare-to-work housing program, farmworker housing, and affordable housing acquisition and rehabilitation.
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